The Supreme Court has overturned a far-reaching High Court finding that a 2015 law, under which sectoral employment orders could set minimum pay and conditions within the building sector, is unconstitutional.
However, the court upheld the High Court’s decision that the minister of state for business acted outside his powers in June 2019 in making a sectoral employment order (SEO) for electricians.
It ruled that SEO should be set aside on grounds including the Labour Court’s failure to set out adequate reasons for recommending that SEO.
The court has remitted the matter to a different panel of the Labour Court to prepare and furnish a recommendation giving reasons in accordance with the applicable law, the Industrial Relations (Amendment) Act 2015.
Tánaiste and Minister for Enterprise Leo Varadkar said the Supreme Court ruling was "good news". He said it meant "the State can set minimum pay and conditions for certain sectors that are above the statutory minimum following an engagement between unions and employers". He said the ruling placed "current and future sectoral employment orders on a firm footing".
The judgment was also welcomed by unions and employer organisations.
Mr Justice John MacMenamin said the Labour Court report in relation to the electricians’ SEO failed to properly set out a proper summary of the submissions made by those interested parties who opposed the making of an SEO and did not engage with those submissions.
What was absent from the recommendation in favour of the SEO, or the accompanying report, was any full description as to the reasons how or why the Labour Court had reached its conclusions, he held.
The minister could not have been satisfied, from the Labour Court report, that the court had complied with the applicable statutory provisions concerning making an SEO and was thus required to refuse to make the SEO, he held.
He also ruled that the Labour Court recommendation that there should be a pension scheme that would contain terms “no less favourable” than those set out in the Construction Workers’ Pension Scheme did not comply with requirements of the 2015 Act.
He was giving the court's main judgment on an appeal by the State over High Court findings in proceedings brought by members of the National Electrical Contractors of Ireland (NECI).
The NECI had challenged the SEO for electricians in proceedings against the Labour Court, the Minister for Business, Enterprise and Innovation, Ireland and the Attorney General.
On Friday, Mr Justice MacMenamin disagreed with the High Court that the parent legislation governing SEOs – Chapter 3 of the Industrial Relations (Amendment) Act 2015 – was invalid by reference to article 15.2.1 of the Constitution, which vests "sole and exclusive" power of making laws for the State in the Oireachtas.
The High Court had found the legislation trespassed upon the exclusive law-making power of the Oireachtas because it delegated legislative authority on important matters of policy to the Minister, and indirectly to the Labour Court, without defined boundaries.
The 2015 Act permits trade unions and employer groups to request the Labour Court, in certain circumstances, to examine terms and conditions for employees in certain sectors.
The Labour Court then reports to the Minister, who can accept or reject its recommendations.
In various findings, the High Court's Mr Justice Garrett Simons said, because the Minister can only either accept or reject the Labour Court's recommendation, it seemed the Minister could not examine the relevant sector, with the effect broad policy choices had been delegated to the Labour Court.
Mr Justice MacMenamin found there was no impermissible delegation of legislation in this instance.